Currency

Visa Taps Deeper Into Bitcoin Through New Global Partnership With Crypto.com

 

Today, Hong Kong-based payment and cryptocurrency platform Crypto.com announced a global partnership with Visa that also includes principal membership in Visa’s network in Australia. The company also plans to roll out fiat lending against bitcoin and other cryptocurrencies as collateral via the Crypto.com Visa Card V -2.9%.

Launched in Singapore in November 2018, the Crypto.com pre-paid Visa Card was one of the first cards tied to bitcoin on the market and is currently the largest Visa program of its kind, with 31 markets covered in Europe, as well as the U.K., Canada, and the U.S., where it launched in July 2019. Users can convert their crypto into one of the supported fiat currencies, such as the U.S. dollar, euro, British pound, and others, pay with their card and make cash withdrawals anywhere Visa is accepted.

With Visa principal membership, Crypto.com will begin direct issuance of the Crypto.com Visa Card in Australia and scale the program to new markets. The company is in the process of shipping cards in Japan and Korea, Latin America, the Middle East, Africa, and Turkey. Its ultimate objective is to make the services available everywhere outside of China. The card program offers up to 8% cashback on purchases with no upper limits, a full rebate on Spotify, Netflix NFLX +1%, and Amazon Prime, and no annual or monthly fees.

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Not your grandparents’ bank

 

Morgan Stanley becomes the first big U.S. bank to offer its wealthy clients access to bitcoin funds
  • The investment bank told its financial advisors Wednesday in an internal memo that it is launching access to three funds that enable ownership of bitcoin, according to people with direct knowledge of the matter.
  • Two of the funds on offer are from Galaxy Digital, a crypto firm founded by Mike Novogratz, while the third is a joint effort from asset manager FS Investments and bitcoin company NYDIG.
  • Morgan Stanley is only allowing its wealthier clients access to the volatile asset: The bank considers it suitable for people with “an aggressive risk tolerance” who have at least $2 million in assets held by the firm. Investment firms need at least $5 million at the bank to qualify for the new stakes.

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Digital Art and Crypto merge for a $69 million sale at Christie’s

 

Until October, the most Mike Winkelmann — the digital artist known as Beeple — had ever sold a print for was $100.

Today, an NFT of his work sold for $69 million at Christie’s. The sale positions him “among the top three most valuable living artists,” according to the auction house.

The record-smashing NFT sale comes after months of increasingly valuable auctions. In October, Winkelmann sold his first series of NFTs, with a pair going for $66,666.66 each. In December, he sold a series of works for $3.5 million total. And last month, one of the NFTs that originally sold for $66,666.66 was resold for $6.6 million.

NFTs, or non-fungible tokens, are unique files that live on a blockchain and are able to verify ownership of a work of digital art. Buyers typically get limited rights to display the digital artwork they represent, but in many ways, they’re just buying bragging rights and an asset they may be able to resell later. The technology has absolutely exploded over the past few weeks — and Winkelmann, more than anyone else, has been at the forefront of its rapid rise.

“He showed us this collage, and that was my eureka moment when I knew this was going to be extremely important,” Noah Davis, a specialist in post-war and contemporary art at Christie’s, told The Verge. “It was just so monumental and so indicative of what NFTs can do.”

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What You Need To Know About Bitcoin NOW

 

Bloomberg Wealth: There comes a point in nearly every financial conversation these days when someone drops the “B” word.

Bitcoin, that is.

Maybe it’s pandemic boredom. Maybe it’s the fact that every billionaire out there wants us to know whether they hate it or love it. In any case, the cryptocurrency has been on — hmm, let’s say an… interesting… ride — over the past few weeks. So I thought I’d write you a primer on the latest. That way you’ll be ready with some (new) talking points the next time one of your friends brings up Bitcoin.

What to say about its price: Bitcoin is up, generally. It was flirting with roughly $55,000 when this email hit your inbox. And it has risen about 600% in the past year. But there’s been some turbulence of late. The price blasted past $58,000 in February, then plummeted late in the month after Elon Musk hinted that prices might be excessive. Here’s a nice quote to recite to your friends if you want to say something forward-looking:

“It wouldn’t shock to see the price make an assault on the February high of $58,350.” That’s what Chris Weston, head of research at Pepperstone Group Ltd., recently wrote in a note.

And if you want to tell people how to buy it, I wrote about that here.

How to explain its recent rise: Remember these two points:

  1. The U.S. stimulus may partly be to blame. Now that $1,400 checks are slated to start hitting millions of Americans’ bank accounts, there is growing talk that there will be more flows into financial markets, which could boost Bitcoin.
  2. But so is growing mainstream acceptance in the corporate world. China’s Meitu Inc., which makes an app that will make you look prettier on the internet, said Sunday that it had bought 379.1 Bitcoins for $17.9 million. Meanwhile Goldman Sachs Group Inc. has said it’s seeing serious demand from institutions as it tries restarting its cryptocurrency trading desk.

A guide to name dropping: Billionaires are just like us! They love weighing in on Bitcoin. You can bring up one (or more!) of the below:

Michael Novogratz: Thinks Bitcoin will probably hit $100,000 before the end of the year

Mark Cuban: His Mavericks team will begin accepting Dogecoin, a “meme” cryptocurrency that started out as a joke

Elon Musk: Recently Tweeted that Bitcoin prices “seem high.”

Bill Gates: Says that unless you’re the world’s richest person, you shouldn’t be buying Bitcoin

Dan Loeb: Has some deep thoughts on the sorts of people who are open to crypto.

How to sound intellectual and maybe even artsy/avant-garde: One of the kookier cryptocurrency trends of late has been the explosion of NFTs (non fungible tokens). People are spending millions. Lindsay Lohan (yes, of “Mean Girls” fame) is involved. NFTs are complicated and I’m not going to try to explain them here, but if you want to start a debate asking “what is art, even?” click here

 

 

 

It was one month ago in what was JPMorgan’s 4th consecutive – and failed – attempt to smack down cryptos when the bank’s strategist Nick Panigirtzoglou wrote that Tesla’s recent $1.5BN purchase of bitcoin would be a one-off and no other institutions would follow Musk (and Microstrategy, and countless other banks) into converting some of their cash into bitcoin. Our response was simple:

No, Nick, you are painfully wrong again… just like you were wrong the last time you looked at your favorite GBTC as a proxy of… something… and predicted that bitcoin would drop. It did not. Furthermore, it’s not “irrespective of how many corporates follow Tesla’s example” – that’s precisely the ballgame right there. Once we get two more companies, then 4, then 8, well even quants know what sequences that is.

Once again, we were right and one of JPM’s top quants was wrong because over the past 24 hours, not one but two major institutions have announced their plans to convert substantial amounts of fiat into crypto.

On Sunday, Hong Kong-listed Meitu which makes image and video processing software, said it had purchased $22 million in ether and $17.9 million of bitcoin, making it the first time a firm has disclosed a major purchase of ETH for its treasury. Meitu said it bought 15,000 ETH and 379.1 BTC in open market transactions on March 5.

Meitu said it’s evaluating the feasibility of integrating blockchain tech into its overseas business, including launching Ethereum-based dApps. ETH is the native token of the Ethereum blockchain. It’s also evaluating potential investments in blockchain-based projects, many of which accept ETH as consideration for investment.

As Coindesk reports, while the company said that while buying crypto helps diversify its holdings away from cash, “More importantly, the Board considers this a demonstration to investors and stakeholders that the Group has the vision and determination to embrace technological evolution, and hence preparing its foray into the blockchain industry.”

But the bigger story here is the one of the snowball effect, because as one becomes two, two becomes four, and so on, more and more companies will jump on board – as we predicted back in January –  and that’s precisely what is going on because just hours after the Meitu news, Bloomberg reported that Norway’s oil billionaire Kjell Inge Rokke “has come out strongly in favor of Bitcoin, as he bets the cryptocurrency will prove the best defense against the disruption facing the finance industry and central banking.”

According to the report Rokke’s Aker ASA, a giant energy conglomerate which controls oil and oil service companies and has more recently branched out into green tech and renewable energy companies, is setting up a new business, Seetee AS, to tap into the potential of Bitcoin, according to a statement on Monday.

For now, Rokke’s investment will be small, and Seetee will start with just 500 million kroner ($58 million) in capital. The firm plans to keep all its liquid investable assets in the cryptocurrency. Aker’s Seetee will focus on investing in Bitcoin, establish partnerships with leading players in the Bitcoin and broader blockchain community, launch Bitcoin verification operations and invest in innovation projects and companies.

“Bit­coin may still go to zero. But it can also become the core of a new monetary ­architecture,” Rokke, Norway’s second-richest person with an estimated $5.4 billion net worth, wrote in a shareholder letter. He says it’s not inconceivable that one Bit­coin could one day “be worth mil­lions of dollars.”

“Peo­ple who know the most about Bit­coin be­lieve its fu­ture success is near­ly inevitable,” Rokke said.

The Norwegian billionaire is only the latest to adopt on the controversial crypto bandwagon which has emerged as the clearest separation line between dead-end Keynesian zealots and their amateur echo chamber scribes, who clutch a failed fiat religion as the answer to all the problems caused by fiat, and libertarians who see crypto as the transition medium to a new monetary world, one unburdened by the idiocy of central planning in any form. And despite growing anger by establishment economists who see themselves obsolete in a new non-fiat world, Bitcoin is being increasingly more embraced by some of the most influential members of the global financial industry. Goldman Sachs Group Inc. is currently working to restart its cryptocurrency trading desk, as it responds to substantial demand for digital assets from institutions.

The situation is different now compared with the 2017 Bitcoin bubble due to “huge” institutional demand across different industry types and from private banking clients, Matt McDermott, global head of digital assets for Goldman Sachs Global Markets Division said.

But back to Aker, which has been active in investing in industrial software, fintech and green energy value chains as the culmination of its 160 year history. Its latest venture into cryptocurrency is intended to help pursue developments in cyber security, financial transactions and emissions-free verification operations, it said.

“The di­rec­tion is clear: fi­nance will be dis­rupt­ed as sure­ly as fos­sil fu­els will be,” Rokke said. “The question is not if, but when.”

Rokke’s full letter is here (pdf link)

Coinbase is about to have a huge $100B+ public listing. Here’s the S-1 breakdown

 

Bitcoin recently hit the $50k milestone. If that feels pricey, how about a share of the largest US cryptocurrency exchange?

Presenting Coinbase (ticker: COIN). The company has been valued at  $100B+ in private secondary trading, which would make its direct listing the largest tech debut since Facebook.

For comparison, its last funding round (2018) valued it at a slightly lower number… $8B.

The business of Coinbase

According to Coinbase’s S-1, the current financial system is an inefficient and costly patchwork of intermediaries. There’s a need for a new, digitally native financial system — AKA the crypto economy.

Coinbase has built an end-to-end infrastructure to enable a safe and user-friendly platform to buy, store, and use crypto assets:

  • Cryptocurrency exchanges: There’s a regular and a pro version for more sophisticated investors.
  • Wallet service: Where customers can safely store their cryptocurrencies.
  • Coinbase commerce: Online retailers can use this software to accept cryptocurrency. Think Paypal, but for crypto.
  • Coinbase card: A physical debit card allowing people to spend cryptocurrency in the physical word

Why the potential $100B valuation? 

Coinbase is one of the largest global cryptocurrency exchanges. Its strengths include:

  • Flywheel effects: As more products develop and more consumers join the platform, more retail users, institutions, and other partners (developers, merchants, etc.) will come to the site.
  • Huge industry growth: The market cap of crypto assets went from $500m in 2012 to $782B by 2020 — 150% growth per year.
  • Rapid revenue increase: Coinbase more than doubled its revenue in 2020 to ~$1.3B. There are 43m retail users, mostly from word-of-mouth marketing.
  • Steady profitability: Unlike many high growth tech companies, Coinbase has been largely profitable in recent years — ending 2020 with $322m in net income.

A watershed moment for crypto at large

Beyond a lucrative exit for founder Brian Armstrong (who already made a cool $60m in 2020 alone), a strong IPO would be a large step for legitimizing the crypto.

Critics view the industry as risky and experimental at best, lawless and illicit at worst. Even tech behemoths like Square and Tesla are just starting to buy Bitcoin.

Successful or not, Coinbase’s IPO is going to make history. No pressure, mate.

(Read our full Coinbase breakdown here)